Key Takeaways
Why did QNT rally so quickly?
Liquidity and the reversal of a long-term downtrend at the $75 support helped explain the sudden gains in the past 24 hours.
Are these gains sustainable?
Though the technical indicators showed they might not be, the price action revealed that a rally to $110 is a reasonable expectation.
Quant [QNT] has rallied 19.5% in 24 hours. The $1.06 billion market cap altcoin has been in a downtrend since early August, and despite the recent gains, its higher timeframe outlook remained bearish.
The 24-hour trading volume of QNT surged by 150% to reach $61 million. The reason for the sudden rebound from below the $75 level could be due to liquidity and the higher timeframe bias.
Fibonacci retracement levels help explain the QNT rally
Source: QNT/USDT on TradingView
The 1-day chart showed that the current trend and momentum for Quant were still bearish despite the quick gains in recent hours. The moving averages were bearish, and the 50 DMA could reject QNT bulls.
The OBV has not been in an uptrend to signal accumulation either, another sign that the current uptick would likely fizzle out.
Yet, looking past the technicals, the price action revealed a more hopeful view. The bullish impulse move from $58.6 to $135.6 that began in April has its 78.6% retracement level at $75.
The start of this week saw QNT dip its toes below this key support level, followed by an explosive rally higher with intense trading volume.
This was a sign that the bearish retracement of the past few months could be turning around, and the next uptrend is being established.
Liquidity is another lens through which the recent, sudden rally made sense. In the second half of October, amidst fearful market conditions, QNT hovered around the $80 mark, building up liquidation levels in both directions.
The long liquidations at $74-$76 were triggered by the price drop at the beginning of November. Once swept, the next target for QNT was the overhead liquidity at $87-$90. This area was about to be swept soon.
What will Quant prices do next? If the long-term recovery idea is true, then the next price target is the dense magnetic zone at $110.
On the other hand, a price drop below $70 would mean that the downtrend is still in play and would invalidate the bullish reversal idea.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
